message. so anything you want to respond to? >> i know that america has a history of interference in the country and to ensure there are covert actions in iran as well but the thing is the hard-liners in power exaggerate and exploit them so they can tighten their own grip on power and they can save the u.s. is all over the country disguised as journalists, activists, human rights campaigners, members of ngo and student activists and people trying to explore new things so they can have an excuse in the name of national security to crack down on these people so that they can stay in power themselves. >> is there fear among the citizens of tiran? >> year of? >> in general, fear of the government? fear of living lives.
>> inside there's a certain extent of freedom and this is one of the paradox in this society that sometimes we can do things in private that are not allowed or are considered prohibited in public for example at weddings or parties or dinners sometimes you see men and women of closely related to one another dancing together and the women are not covered but in public they could not do these things and this kind of freedom in prague is not always secure. these kind of parties and gatherings can be broken into are busted and people could be punished. i think it is mostly a sere expression, public expression for certain changes like political freedom, freedom of expression and all ideas that the regime considers threatening. >> a tuitele tiemann. what was the purpose of capturing you?
what did they hope to accomplish? >> that is a good question and i cannot say for certain that over time during my captivity i can to various possible conclusions specially after they told me that they knew after booktv.org told me they knew from the beginning of the confession was false and on a later occasion the deputy prosecutor told me in private of course basically he knew i wasn't a spy and it made me wonder how often to do they falsely accuse people. i think it is possible they wanted to use my confession as a way to intimidate the iranians who want better relations with america and also to intimidate other journalists, national researchers, academics and so on also i think they need a real-life example and i wasn't the only one they falsely accused of being a spy or trying
to revolution were recovered. one of my cell mates was sentenced three years for the revolution but she was a humanitarian worker working for an american ngo trying to administer in exchange program between america and iran and to commit official says you are trying to create a revolution to change the revolution through nonviolent means and she was doing no such thing so it is a context in which i was arrested. she had been arrested before me as well as to doctors arrested before me and if you look of the media coverage of their arrests and convictions it was similar to mine that the hard-line papers in the media said america has all these agents in iran and they might look normal, they might look like doctors and so long but really they're trying to overthrow the regime which the doctors of course were innocent. >> were you ever tortured?
>> i wasn't specifically tortured but i was under psychological and mental pressure and when i was released from prison people lost me if i was tortured and i said they didn't touch me so i guess not but human rights activists told me there is something called white torture which doesn't leave a mark on the body but can devastate the mind and the conscience and the combination of manipulation and intimidation like putting you in solitary confinement without access to an attorney or to your family and also putting such pressures on you that you just feel like you would lose all sense of self to a committee and you feel a sense of humiliation and shame, and i think they are at def in this and know these techniques can be effective in wearing a prisoner down. >> when did you first see a lawyer? >> i first saw a lawyer right
after recounted. actually the day i was taken into court which was i think maybe about five weeks after my arrest and i was trying to recount that day a man came up to me and said ms. roxana saberi and he said i am your lawyer. i had never seen him before. i thought maybe my interrogators were playing a trick on me and saying you have a lawyer. i went on to recount my confession to the magistrate and afterwards i was allowed to talk to this man who said my boyfriend in iran had found him for me so that was the first time and then he told me that my parents knew where i was. >> how effective is a lawyer in tehran? >> it depends on what type of lawyer you have. i know many journalists in jail today in the iran have not been able to see lawyers, sometimes they are appointed by the regime
and they are not aware of rebuke representing them well. in my case mine were under a lot of pressure by the authorities may be the intelligent industry or the fiduciary and i feel they did not represent me as well as they should. the lawyers i really wanted was a nobel peace prize winner who was very courageous and represented a lot of i was not allowed to hunt. i was threatened from having them. >> how much did a lawyer cost? did your parents before it? >> yes i'll let my father take care of it. >> so how much did this whole ordeal cost you? do you have any idea? >> financially? >> yes. >> i can't say. my parents came to iran but fortunately -- on the one hand, the cost is more emotional. i think my parents are difficult even though they are very strong
fortunately i had a lot of support and they had a lot of support in north dakota, the neighbors took care of the home and they said that a fund to help and my all modern in the northwestern university in so many others, friends and total strangers were very supportive and now there are so many innocent people in prison and including journalists, human-rights activists -- >> still there. are the in evin prison? >> and evin prison and have not seen a lawyer even ones and the will year is an independent minded person who would represent them well. they've only been able to call home once and one is suffering from depression and the lummis and the work on the hong first-rate and i hope people can
continue. their web site is through the hiker's.org. you can write a letter and sometimes they get the letters and also journalists need more attention on their cases because there are some elements in the regime who truly do carroll the image of the regime and they ought to be seen since they are susceptible to an outcry even on the part of ordinary individuals in different countries. >> of the day that he left evin prison, how long before you got to the airport? did you take a scheduled airline flight out of the country? >> it took a few days before i could leave the country because the that confiscated my passport and they didn't want to give them back right away and i think they wanted to keep them even longer but fortunately i was able to get them after two days. >> how did you do that? >> my boyfriend called some people and i don't know exactly what happened. but in the and i could get it
because i thought they would keep me there longer and who knew, i would be strongly monitored so i was able to get them and with my parents i was able to leave the country and it happened so quickly i didn't get to say goodbye to a lot of my goodbye iranian friends because i made some good friends during those years. >> do you foresee going back there? >> i hope i can someday. now is probably not the best time but i grew to love the country and i hope i can see my friends again. >> can you e-mail them? >> i can. >> do you? >> usually i use a different e-mail address. i don't want to get anybody in trouble. >> roxana saberi. pure is the book, "between two worlds my life and to the activity in iran. thank you for joining us on booktv. and that will wrap up the ten hours of live coverage of the
"los angeles times" festival of books 2010 here on the campus of ucla. thank you all very much for being with us and thanks to everybody who participated and we have a lot of folks at c-span who've been working on this project and we think that as well. as you can see it is a beautiful summer day. it is midafternoon in los angeles and everything we've shown you will be free air tonight at 1 a.m. eastern time, 10 p.m. on the west coast so all five and half hours of today's coverage will be air. thanks for being with us. up next on booktv is a taped program that we take a couple of weeks ago. simon johnson, his book is quote code 13 bankers the wall street takeover and the next financial meltdown." trip is simon johnson.
a former chief economist with the international monetary fund talks about the power of wall street banks since the 2008 financial collapse. simon johnson argues the banks which are still too big to fail continue to take excessive risk and could lead into another collapse. the center for strategic and international studies in washington, d.c. posts this hour minute and 20 minute event. >> my name is i.t. and on behalf of the board and council washington, d.c. i welcome you here this evening. we are pleased to host simon johnson, who with his co author, james kwak, has just published a book, "13 bankers the wall
street takeover and the next financial meltdown. the world affairs council brings to these events journalists, academics, government officials and he yes, sometimes even bankers to discuss with the audience than the international issues of the time. over the course of the last two years we come back again and again to what is now being referred to as the great recession and to the financial crisis that led to it and heard from and continue to present speakers who will help us understand what happened and why and what the implications and indications are for america's position in the world for d'huez relations with others one can think of the inslee of the u.s. and china relations and the implication for america's long-term capabilities to project power and influence global events. the world affairs council of the upcoming programs this month
include fred pierce, next tuesday evening he will be speaking about his new book, "the coming population crash and the planets surprising teacher." and april 27 we will host paul for a look at his new book, "the plundered planet" published by oxford university press. i hope he will be able to join those events. tonight we host simon johnson the ronald professor of entrepreneurship at mit sloan school of management and a fellow at the peterson institute for international economics here in washington d.c.. he is the co-founder of the baseline scenario dolph, focusing on the world economy and a member of the congressional budget office's advisers. january of this year the huffingtonpost.com is contributing business editor. prior to joining the faculty of mit, dr. johnson was the chief economist the international monetary fund and received his
ph.d. from mit, holds an m.b.a. from the university of manchester and va from oxford. following his remarks come professor johnson will be taking questions from the audience if you have a question i would ask you to wait for the microphone that will be brought a round in order the video equipment will be able to pick up the question. now please join me in welcoming professor simon johnson. [applause] >> thank you everyone for taking time on this beautiful summer evening and early april to come and listen to a talk in the doors. i would like to talk to you obviously about financial system and the situation we find ourselves in today and i think this is a very good day and moment to have this conversation. i just came from capitol hill
from one of many briefings going on people are grappling with the questions of what legislation should be passed or not passed that would try and prevent a major financial meltdown from happening again. we faced in september 2008 as you know an enormous economic and financial calamity and it seems only reasonable and completely consistent with the nature of american democracy that we would fix this. something that happened we can argue about the details. again that is very space of us. we have an administration that is packed with experienced professionals. we have a political process that has had a good track record over 200 years of taking on and facing down major problems.
so where are we on fixing the system that got us into this trouble? well, i would say quite honestly, quite bluntly and we will discuss this as we go through the evening, i would say we are nowhere. we are at square zero. the legislation currently before congress does not fix in my view of the essence of the problem, the heart of the matter in the september 2008 and the month that follows it in march 2009 "13 bankers" came to the white house to be saved. the essence of that problem is known as too big to fail. those 13 banks and the bankers who represented them were saved unconditionally by the obama administration.
and when you talk to the senior people in the obama administration, and i do talk to them, and i take them very seriously and i don't know if they take me seriously but they do talk to me, they say they had saved those 13 bankers. they saved the financial system. i agree with that. david kafta of the financial system. our economy cannot function without credit. i think you know that. but the insist they had to save these 13 bankers, their jobs, their bonuses, their pensions, the perks that what the directors. their staff, their empires, their attitude, they couldn't russell if they're on their back. you get the general idea. they couldn't to survey here on their head without causing deep recession and increasing the probability of a major financial calamity. i don't think that is true.
in the book we go through in some detail why we think the government in the administration had other options in march of last year. but just assume that it's true. just assume for a moment that they are light and that that is an accurate statement of fact. that is extraordinary. that means we have a small number of financial institutions, small number of people who recently had to give the body to export money and various kinds of other support from the state's. that's incredible. that is not without precedent in american history but we will talk about some historical it symbols as we go through the evening but that is terrible. if the banks are so big that you cannot allow them to feel that is pretty scary but if you must save them without disturbing anything about their incentives
for their attitudes, you have an enormous problem. let me tell you know what the punch lines in the book and one of the key points i was trying to hammer home on capitol hill just now our largest banks, because it does come down to the six banks, the largest six banks of a total asset the size of the bank which is 63% of gdp and that is pretty big. where were they before the crisis? 2005, 2006, 2007? they were smaller, 56, 58% of gdp. were they in 1995? same banks and their predecessors. 17% of gdp. they are getting bigger. of course they are getting bigger they were bailed out and saved and about to buy other banks. the cost of the funding today in the credit market is estimated accurately to be between 75 to 80 basis points lower than other
banks. that is .752.8 percentage points. this is a big funding advantage. jamie dimond, the ceo of jpmorgan chase, one of the most successful banks recently said in a letter to his shareholders just this week that if we get big because we are good we should be allowed to reach any size we want. that is the free market. that's not the free market. we do not have a free market. we have too big to fail on a fair advantage. if you run a massive bank and i am assuming that none of you do because they don't come to hear me talk. [laughter] but i would love to have the debate. if you have a massive bank you have faced tremendous unfair advantage right now. you are too big to fail. you will be saved and the market recognizes that and course you are going to get bigger.
there is nothing in jamie dimond's job description at bat jpmorgan chase that says it's responsible for american our global financial stability. i am confident in asserting that. the description is to make money for his shareholders and for the colleagues of jpmorgan chase. we can discuss how well he does it certainly you've seen the latest compensation figure. the 2009 total compensation was higher than it's ever been. exhibit compensation was down a bit but for the working thinks it is up. besio of wells fargo, we are seeing the details of a cash bailout for 2009. cash, which is what the administration asked them not to do it in march to doesn't mind president obama said to the
banks please be careful going forward and be of yourselves and please don't take the risks and we presume he said please read in the competition none of which said that. they got paid a very big cash salary which is exactly contrary to what the administration asked. when questioned about why he was getting so much cash the spokesperson said we had a very good year in 2009. they were saved by the taxpayer and excessive generosity certainly generosity of this administration. it is extraordinary. the attitude of these people, and nothing i say, nothing in the book is vindictive. nothing is intended to get back at these people. this is just forward-looking. let's talk about the future. we could argue actually we could have an interesting argument
about the extent to which the banks perceive themselves to be too big to fail before september 2008. that is an interesting discussion but that is not my focus for the focus of the book. the question is now a do they think they are too big to fail? goldman sachs ploch return on $800 billion. if goldman sachs hit a rock and i don't know the extent which you follow this on a daily basis but considering today greece is in more trouble than people were anticipating who knows the evidence of balance sheet transactions. i am not saying anyone is in trouble but let's imagine that they hit rock today, tomorrow, could they fail? could they go bankrupt? no. absolutely not. they would be saved by the government. the consequence of failing would
be far too dramatic. >> what if the chris dodd bill passes in the form currently proposed? what if that passes or something close to that? would they let goldman sachs failed? would it go into bankruptcy? no. and we can discuss the details and i am aware of this makes some of my friends on capitol hill quite upset when i say it. i used to work with the imf. the job of the imf as a understand is to tell you the harsh reality. unfortunately they can't articulate that with regard to the united states so i will do at. [laughter] it is the nasty truth. it is very unpleasant. i am sympathetic people pushing forward reform on capitol hill. we are not there yet. so where are we? how did we get here and where should we go moving forward?
>> treasury secretary geithner since we had a flood, bad luck, we should take some actions in case for the next time to. it's an interesting thing hank paulson in his memoir former treasury secretary paulson says major financial crisis occurred and jamie dimond, the head of jpmorgan chase says it is every four to eight years you get the picture. if something happens in the financial system how big will it be the next time, that is the key question geithner said these things are rare but that assumes we're looking at random occurrences and we haven't changed our structure. i would say that the levees protecting against the flood have been undermined in the past 30 to 40 years.
and we should worry about the more regular shocks identified by mr. paulson and mr. diamond and mr. sellars hitting us before we have had a chance to strengthen the levees and we haven't strengthened the levees as i think you know because the powerful place in the financial sector and the allies do not want reform. they see it as contrary to their interests. and it is letting contrary to the interest of the people that run the biggest banks. it is not contrary to our interest or to the interest of the society. now psychiatry geithner also says in this regard but we will not lose very much money. on the rescue package. we might actually make money on the t.a.r.p. that injected money into the banks as you recall. if we lose money it'll be because of the car companies and because of aig. that isn't the right math. the way to think about the cost of the crisis, there's a couple ways to think about it. one is 8 million jobs lost since
2007. that is dramatic and unnecessary and while we see struggling going forward you could worry about with the federal reserve has had to do and what that has gone to the credibility of the federal reserve going forward and that is an interesting and very important discussion. but i would focus on the fiscal cost, on the balance sheet. what are some of the balance sheets of the government? what is the increase in the net and government debt relative to gdp to grow to to the economy held by the sector? that is a core measure, one cord measure i would focus on on how much the government is indebted. this is about 40% of gdp. before the crisis. 40. and i am on a panel of economic advisors to the congressional budget office. i'm going to give you my numbers, not their numbers, but i would say their numbers seem to be moving in my direction. my estimate is we will double
the debt to gdp and go from about 40 to 80% as a result of this crisis and all of the measures the government was forced to take in order to reduce the likelihood we would get massive depression and make sure it turned out only to be a great recession, or no recession. but i think it would have been worse without those contracting issues. that is a big increase in debt. that is not enough to the country, that is not enough to cause a crisis per say. it doesn't turn us into greece, thank goodness but it is completely unnecessary, unwarranted and the bigger picture and we haven't fixed the problem. we have not fixed the financial system and its ability to take on reckless risks and do well when things are lucky and to show that risk on to us on to society when things go badly.
goldman sachs is a big banker of the chinese car company that just bought balto from four ford. that is a risky investment. i am not opposed to risk and people taking a risk if they want to take risk. i like it. it is a big driver of growth in the united states and around the world think about goldman sachs and what goldman sachs did. goldman sachs is a bank holding company. they became a bank holding company in september, 2008 as a way to save it from collapse. it has access to the said's discount window. if the private equity investments do well i can assure you they would make all like bandits to use the technical term. [laughter] if it goes badly, whose problem is that? it is the bank. it is a bank with access to the discount window. we do not let them fail. we cannot let them fail. and gold enzus okay. if that is your attitude we will stop being a bank. thank you. wait a minute, you guys, you
became a bank in order to save you. they were an investment bank before, rather loose not entirely accurate term though they were not regulated by the federal reserve. and they took a lot of risks and they were on the verge of failing through no fault of their own again in the book we beg to differ. if you let them out at this size with these characteristics and they get into trouble again you let them become a bank again and give them access to the federal reserve. no, no, no. we won't do it. honestly, we promise. you can pass the law. at the end of the day when faced by financial calamity the government of the country will always have sufficient emergency power to do what it takes to save the day. but the nature of american power and executive power in the united states. and if you don't like you can take them to the supreme court and good luck winning that case.
next time they fail, there is nothing, i can assure you, and economics or law or physics that says the amount of offsetting amputates you can provide your monetary policy or through fiscal policy will roughly match the negative shocks are getting from the financial system. in 1930, the federal government had wanted to do a sensible what we have regarded sensible fiscal policy and fiscal stimulus because they're having a major problem. historians estimate the federal government could jennison was up 1% of gdp because the government was small, much smaller than now. that would've made any difference. we did 40% -- will be increased over several years ago to gdp gdp 40%. next time or up to 80. next time we may not have the
capacity to increase our debt. diverting the shock of the imaginative and i think probably doesn't do successful forms of corrugated evening. next time will that make so much difference? i have no idea. i don't know. no one can tell you. the idea that we had a big financial dutch rial said in a broadly sensible measures, that's what i think. next time we may not be able to offset it. mena lose 8 million jobs, we could lose 20 million jobs easily. next i marine aye down and come back. remain up or down stay down for long time. the expense of other countries. that's experience of the united states in the 1930's. the big banks are becoming bigger. they're too big to fail not that they will become too big to save you do have a master fronting the damage could they a lot of attitude as let's get bigger.
the market allow them to become big. this is not a market. this is not a market economy in this regard. this is some people who captured the state. and intellectual tradition rich on this book, by the way, is not particularly that is the last. we cite thomas jefferson a link. but i would stretch in terms of modern anchors how much redrawn george stickler of university of chicago professor, very much for free markets closed for a word about regulatory capture. and her absolute right to worry about that. bullies in this such as regulatory capture. it's the capture. its stickler and stickler for a nobel prize by the way for the speculation capture. it's take that further pimping about the state been taken over just at the end of a particular interest group. how did we get here?
how did we find ourselves in this incredibly awkward and unpleasant situation? getting the answer is probably pretty simple. i mean, i know that there are many issues to what happened are 2008 and their many causes and pieces that came together for the nature of that particular crisis, but you need to go back further. you need to go back to rethink at least 1990, perhaps i can 70's and look at the regulation in this country. some firm started under president carter and obviously got a big impetus under president reagan resolution. some i think with sensible and some parts i would not run at all back here at i like cheap air travel, for example. we can debate that agenda, but deregulation in this form has led to great danger. if you look at what has happened to compensation in the financial
site are over the past century, it's very interesting. there's some very good work done by them and some of the key figures in our boat. they show them in terms of average compensation compared to average private-sector wages, in the 40's, 50's, 60's and into the 70's, banking was not particularly wealthy good it was a so-called 363 banking, which was paid 2% on deposits, blended at 6%, coakley g-golf by 6:00 in the afternoon. also known as banking. he wasn't about myself. to anyone. it also wasn't, fast-moving, huge fortunes being made weird like what began to happen in the 1980's. by michael lewis of course is very much in the news now with his interesting new book, the big short, pretty is still a
moment he captures in the 1980's is this more speculative side of finance is starting to find its feet and become bigger. but one point i would stress and we make this point in the book is the people he worked with, the fallen brothers, that on treating and speculating outfit by modern standards with tiny. john good for it who was the legendary so-called king of wall street in the mid-1980's whitney then rang in the top 20 now. and in fact, the largest hedge fund we have in the country, which i believe is approaching the headcount at songbird cut at the time michael lewis wrote his book. he read michael lewis' book in a recoil from the attitude and from the culture thing. certainly now i think maybe would. but that was just the beginning. everything that came afterwards scale that up. and the key thing is they got to pay a lot for money to the compensation went back to what it was relative to the private
sector, relative to the reform of the 1930's. when fdr reined in speculative finance, he ended up cutting their pay. he didn't target their pay, but that's what happens when you make thinking boring. now, the nature of democracy, as you know, and such that if you have money coming you can be heard. you can certainly make campaign contributions. i think you know all about that. you can also impress people. you can become really compelling and fascinating and central to the culture and that's exactly what happened to finance. this idea that greed is good, which all of us i think don't intend in its original movie wall street as a caption or a tail end of the statement of access actually. that became the motto of the
1990's. in the huge irony, i think it's an irony, it feels like an irony looking back is that the new break in resolution apply to finance reach fruition during the clinton administration when he was secretary of the treasure. many of the people who are not responsible for helping to clean up the financial mess hopefully worked with mr. rubin at treasury during 1890's. it's a great opportunity for them to make amends, still waiting to see progress on that. but we all did it together. i mean, this is a culture shifted. wall street became good or the percentage of graduates from top universities, for example, who went to finance coming up, for us to configure from the data from 1970 with a 10% of the peak of the subprime boom it was 40%, 45%.
it's money, its power. it's ideology. i spent a lot of time talking to people in washington. i live in washington and i spent a lot of time talking to come you know, people in and around the officials, politicians, their staff and obviously the attitudes have begun to change. this is not ever say that although people think it is not what it was before september 2008 but is still the case that an amazing number of people think finances good, unregulated finances better completely unfettered megabanks are the best. this idea is wrong. this idea is dangerous. this idea must he stopped. how are we going to do it? while the biggest things have to become smaller.
you know, people say to me, well simon, there's a lot going on. it's very complicated coming up, size doesn't matter. into which i respond really? citigroup, when it failed, and serving into liquid of the difficulties. i always forget. in fall 2008, was a $2.5 trillion think it does include the off-balance sheet liabilities had to bring back on the balance sheet, 2.5 trillion. i may ask you this, if citibank identified joined dollars bank in september 2008 our problems now be better or worse? what is citigroup started to approach or jpmorgan chase by the way started to approach the world bank of scotland relative to the u.k. economy. what if we had a bank that for ? and don't kid yourself. don't say this couldn't possibly happen that increase in scale climate. it absolutely could have been.
just look at the increases have ahead of have the past 15, 20 years. but that all the events as they have now. making our biggest banks smaller is not a sufficient condition for financial stability in avoiding the crisis in this country, but it is necessary. and this is what i was just arguing on capitol hill. show me how you make goldman sachs saved without making it a lot taller. the largest financial system would let tail with the i.t. group. it had a balance sheet of about $80 billion, it 80. olden saxe balance sheet peaked at 1 trillion before the crisis on a hundred trillion now. cit group screens that if they're about to fail, if he were rescued, there'd be incredible disruption to the provision of credit to small businesses, which is their
specialty. there is a lot of question about whether or not to rescue them and to their credit the administration helped i think by shoe leather of the ftc decided to step back and let them fail. you cannot find those consequences of that failure today. they were bluffing. goldman sachs 800 billion is not bluffing. if you let them fail, you would have a very serious problem on your hands. i certainly have the administration sees it and i grew with them actually. now people say, well, simon, we have the resolution authority in the.filter the resolution authority is supported by the white house for this will allow us to take over and managed the failure and the contraction of the liquidation of megabanks when they get into trouble in the future. well, with all due respect, to people who work long and hard on capitol hill and i do have a great show of respect for many of them, the resolution
authority is a unicorn. not unicorn is a magical beast, with fantastic recuperative powers. he's also a myth. check with your children if you don't believe me. they'll tell you. if you call for unicorn, it doesn't come. there are no unicorns for the resolution authority cannot work because the resolution authority as a prospect by congress with the u.s. resolution authority. would not apply to a cross-border operations. citigroup does business in about 100 countries. lehman brothers, when it failed at more than 600,000 in london. the london operation of lehman operates on the basis of money that was white from new york and started every trading day. there was no wire on the monday.
the u.s. government doesn't have the legal right nor will ever have the legal right to manage only the next equivalent in another country. you can go talk to did she try deputy. actually you probably can't, but i can and i have and i put it to them like this, that they will not allow, agree to a cross-border resolution authority, which is what would be required to apply with the treasury says it doing, but to really make that work across the world. the g20 will not agree to that. they can even get one within europe. it's very interesting. the imf has been urging the european union and even more specifically the euro sound, as you know, shows the currency is one special thing. it's been really pushing it hard to come up with a cross-border resolution authority or mechanism to deal with the failure of eggs within europe that have operations in multiple
countries. they haven't done it, they can't do it, they won't do it. they just will not give up that level of sovereignty. they also won't ask other countries to protect themselves on the right. and i once had the opportunity to bring this up with the leading proponents of the rest were still authority for the ear. i take every opportunity, i can assure you, to debate in public, particularly with cameras on. leading bank is, there aren't that many opportunities, they don't commoditized me there also. but i did have an opportunity to speak to the head of -- a big part of one of these local banks. actually, there were no cameras, but this was in front of g20 deputies. and this is a very smart person with great credibility and legitimacy in front of the former regulator actually. and i said to him, explain to become your pushing a resolution authority, your boss is pushing the resolution authority as the
magic wallet, as a measure that will end too big to fail. that's what they say. explain to me in front of these expert how that will help us manage the failure of your bank or another major bank like citigroup. and this gentleman, to his eternal credit can delete a deep reflection of honesty that is that the time? i have to go to the airport. that was his answer. there is no answer. the resolution will authority as an allusion. it's a dangerous solution actually. if you take it off the table and remove that from all the rhetoric you see another proposals are for you, before congress, you have nothing that will deal with too big to fail. you have some measures that will protect consumers. we support that in the book you're a think elizabeth warren has led the charge on the admirably over the past few years and has helped to shape the consensus. and that's what we need to do
now on the too big to fail, and the size of the things, besides our biggest things, should the consensus. there is no evidence and i mean really, no evidence of economies of scale or scope or other social benefits to an increase in bank scale of $100 billion in total assets. and we're talking about banks that are in the trillions of dollars. actually, we can argue about how compelling the evidence is for social benefits of banks above $10 billion, but above $100 billion is nothing. now, there are claims when jamie diamond from jpmorgan made this to his shareholders. it is flatly not true. in the book goes through this for the book is the evidence. the book has been in the hands of thinkers for months. of course they're going to need another copy. i make this presentation to leading finance directors. i'm on the board of one of the
period i talked to lawyers, i talked to the big d.c. law firm at lunch yesterday. i give this talk endlessly. i even set it to stephen pallbearer. last night his questioning was not different from what you hear on camera. but anyway, there is no evidence, none. what does it take to change the consensus? what would it take to move the opinion of people like you away from perhaps been a little worried towards being obsolete convinced this is an enormous pressing problem and make in the largest ahlers is essential. in 1902, teddy roosevelt, the president of the united states decided to take our northern securities, which was a massive
monopoly, a railroad monopoly traded by jpmorgan and some of his colleagues. in the teddy roosevelt did that, nobody really understood why he was doing it. nobody thought he had a chance for the senate was called the millionaires club for a reason and actually there was no theory about why this was a good idea. all of modern antitrust thinking came after roosevelt decided to confront jpmorgan. no jpmorgan came to the white house. he was upset. and he said, if we done anything wrong with regard to the structure of his monopoly, send your man to see my man and will fix it up. teddy roosevelt and his attorney general, planned an ox, said no, we don't want to fix it up. we want to stop it. and we're going to go to the spree in court and they did and they want five to four in the
supreme court. from that decision came the modern antitrust movement. and by 1912, 10 years later, this movement was strong enough, the thinking behind it, they can insist in the change of consensus was dramatic enough from the standard oil was broken up into 35, 37 pieces. now standard oil was the lifeblood of the american economy. this is a manufacturing economy, a transportation economy. that was fuel that economy. but people had become convinced because of the leadership of teddy roosevelt that while they could be beautiful in america under some circumstances and is certainly about the private benefits, they could also be dangerous to society. it's a pretty simple point and does what i think was a very simple and direct thinker on this issue. and he was just as much concerned about the political implications of these massive
truss. with the industrial trust in a rowboat trusted to his attention. he was just as worried about the political side as he was about the economic side. but the economic side is important and obvious the way with we develop a lot of the theory and practice. and maybe ask you, who in this room -- i mean some of these did very well because john d rockefeller did well and williamsburg did even better because they rebuilt it. i thought he was trying to make a good coolness or would like to re-create the standard oil monopoly? okay, lunch time there was one person, so we've got nobody now. that's an improvement. he said he was from the energy industry. of course not. of course it's obvious. it is intuitive that if you let one company control to a substantial complete almost
degree an oil distribution and even production in this country, that would be bad for society. good for the guys who run the company, may be good for the shareholders depending on how that works out, not good for the united states. the basic principle on which we structure that economy in the 20th century and yes i understand, dulles, kitty, there's always back and forth her time an economist. i'm dismal, right? and i'm cynical, you know that. and we make this very clear in the book. but there is no way that it is acceptable for these large banks to operate out of size, with this kind of risk profile come with this amount of political power. it must stop. and these are six banks, that's it. at our proposal, the argument were having on congress and
we'll see how many people will bring with us. a lot of people are interested, but a lot of people are afraid or your it's about limiting the power of the size of six eggs. the blind spot in the legislation. six banks, which operate, it is true, very much in the interest of the people who control them. we're talking about several hundred people. and we won't take them on. were not ready to take them on. andrew jackson bought the second bank of the united states was too powerful in the 1830's. and a lot of people thought andrew jackson was crazy. you know, he took a bullet early in his career. they said a lead is leaking out of the bullet. the second bank of the united states is a well-run bank. nicholas biddle was a charming character by all accounts. and jackson was struggling to really get his point across, though he didn't have that much going on capitol hill. and yet even less support was
nicholas biddle started to run for the trunk urge people to vote in his direction. but as biddle thought back and as biddle extended the campaign contributions, and as biddle, when biddle said on contracting in order to make the point that you cannot reina us and how much people believe that jackson was onto something. and this is what jefferson was warned about. feet they debated these issues at the beginning of the republican hamilton was right i would say are most or much of the economic substance, but jefferson -- that's what was on the boat. represent have a very important point which is absolutely correct, which is you must fear the arrival in the entrenchment of the financial aristocracy. that's what jackson paced and prevailed against. that's a teddy roosevelt faced
very similar to prevailed against. it's also what fdr faced in the 1930's and fixed 50 years. i think honestly that's about as much as they can hope for. these things do not stay fixed for ever. and that's a story of the american republic of this dimension is that a repeated cycle, repeated confrontation between financial power and elected democrat and principled leadership. we need to find teddy roosevelt again. we need to have a teddy roosevelt moment. he acted in a preemptive manner. he did not act in the face of the crisis. he acted because he thought finance had become too powerful and too dangerous good if you bake, i think you'll fix this eventually. but you'll fix it after another awful crisis. you'll have an ascii art, i think, i hope will come and fix it, but why wait? and also, what if you don't get
fdr? this is obviously the experience of many other countries. if you haven't economic cops come you don't always get sensible leaders and you often get chaos or craziness. a lot of the popular anger i think on this issue, one of the people who are angry from left and from right have a very important point. in the book is designed in part to speak to them and to help articulate that anger into sensible policy proposals. but it may not have been nne just just have anger. legitimate anger, but unprotected anger and offense of crazy things can have been. in conclusion, i just would say that we need to fix this. it's a fixable problem. there are many tough problems facing our country in the world and their many problems that are
really hard to address. i mean come and economic terms, in ethical terms, and broadly speaking political terms, this is not one of those problems. this is a financial system that got out of control. it structures become dangerous. it must be fixed. if bridges were falling down because of a poor design, we would fix the design of the bridges. there's not a country that's big on denial. but were not doing it because finances very powerful because a big financial players have a strong degree of ideological sway still. and this problem will be fixed when and if people like yourself become convinced and commenced the people you know and vote for
people who make this a top priority. and i think if were likely we can do it in 10 years. if you're lucky we can have a teddy roosevelt moment. but we haven't even started yet. and i think now is the time to do that. thank you very much. [applause] questions and you're supposed to wait for this microphone. in the front row here i'll do left, right, center. i'm a very balanced political. we then put them in the front to show you how the support we draw from across the political spectrum. so i do the same thing within the room. in the center to start with. >> hello? who else besides you is making this case that is a political figure who is marshaling
arguments based on evidence, obviously essentially you're a professor speaking with practical experience, but who's doing it in the political form other than maybe mr. volcker. and the reason i ask that question is there is no committee. there's no marshaling of facts and the political form that is possible for the public to digest at this point. we don't have a presence on, although obama has done remarkably well in certain areas, like roosevelt in 1933, who was calling the bankers incompetent, cruel, et cetera. so there was no question that that point where the enemy was and that's where they addressed it. and in the circumstances, that case hasn't been made. and you're starting to make it, but in a article form or you
take action to do what has begun hasn't been done. >> i absolutely agree. that's why we're early day. the president could do it, there's no question. he's perfectly capable of doing it and i run a website and one of the leading economics blogs in a country called baseline scenario and we follow this issue on a day-to-day basis. and i also do this with the proposed. you know, were strong supporters of the president on some dimensions, but not on this one. even within the financial issues on the consumer protection and think some of them leave but i think the administration ask into sensible position and they are pushing hard. and you want, the deputy secretary gave a fiery speech into the chamber of commerce at two weeks ago now he took them on. he said you're spending $1.4 million a day lobbying against financial reform. you have four or five lobbyists or member of congress, you are pushing for measures that are
not in the interest of your membership. it's all been distorted to favor some particular big players. and it should stop and that's exactly the right to say, but they're not seeing it on to fail. they're not taking that issue on. honestly there are politicians out there who have hopes and expectations. i think are 10 to 15 members of the democratic members who could potentially depending how the debate goes over the next few weeks come up with potential positions. right now there's only one who's really speaking clearly on this issue and that is senator ted cal from delaware. he was appointed to joe biden seat and is not running for reelection. he therefore has no fear of any consequence. phoenicia look at his speeches. he's given three speeches in the last couple weeks are remarkable. and you might say he's just been appointed editor. i can assure you anyone who speaks truth about these issues right now gets attention. and larry summers was questioned on the abc weekend show about
what senator colberg said he was senator colberg is exactly right. i think he would be countable with, but that's where we've got to go and we need to bring more voices out. this debate run finance reform in the senate right now is very important. i think it's incredibly important that this be positioned so that people can speak clearly and truthfully on this issue and not get so lost in some tactical, political gain. so we'll see how that figures out. i'll take a question on the right, the gentleman in the back and then we'll go to the left. [inaudible] >> i don't support the economist, but when a church on dianne rein the other day, my mind went back some, i think 15 years and i can remember this huge debate that went on, when banks were allowed to become investment companies as well.
i don't know if i have that right. and there was a lot of harbingers of them at that time and i think that's of course a lot with what happened. instead of breaking these companies up, would it have the same purpose to divide retail bank in again from the investment banking and allow bank of america to be a big retail banker at 3% interest, et cetera and then be separate from the investment and let that be the breakout. without work? so this question is often put, a very good question in terms of should we go back to class to go, which of course was the 1930's that made the split for what we called investment banks in the commercial banks i think the spirit of classico spray. the spirit is you should be late to plow with house money. if you have federally guaranteed deposits, if you're so big they would have to save you, if you
run the payment system in this country, you get an extra level of protection. you shouldn't be allowed to go out and take massive speculative events. that's the basic idea. i think we need to otterness glass-steagall and applied and that's what we proposed in our boat. and so while arguing for a size cap on the sides of banks as a percent of the economy coming% of gdp, we also said the bank should choose whether we want to be aborting bank or commercial bank and they can be a bit bigger, but not that way. or would they want to be reckless, sorry not write this, risk-taking as a speculative investment bank in which case they'd have to be smaller. so their two cats. you choose which one you want and ask them to get banks tend to apply with that. it would obviously have to comply in the way their shareholders didn't lose value of the alternatives. so i think that i think this is also our interpretation of the poker principle, not the local rules that have been put forward
concretely, but the principle behind what mr. volcker has been arguing is completely sound and senator copeland is arguing for that for two. if you're an opportunity to go to las vegas with coming in now, the government of the united states or your brother-in-law or your dad back a new and absorbing all your losses, would you take more risk or less risk class i would take more risk? if it goes well, you get to keep the upside. if it goes badly, someone else is going to pay for that. that's good. it's not a market economy, who cares. who cares. it's a great opportunity for me i should take it. that basic rentable that's a big part of what fdr fix. we need to fix it again. question on the last. the lady in the middle here.
>> two questions. one is, what do you think should be done to re-create the antitrust, you know, movement while the administration is here. and you mention that there's some difficulties with that to get the g20 two agreed to, you know, how about this. what can the u.s. do on this front? another question is assuming that economist, left and right, many of them are agreeing with you because your advocating, well, on the right flea markets and on the left regulation, you have some consensus on the left and right. why do you think then that there are such washing and, you know, with republican but they supposedly a segment advocating markets. is it because there holdings the larger it cursed and no longer represent enough.
how do you go about dealing with that, you know, considering we want to bring together maybe the two sides and it might be possible for the washington politicians. and i can't take the question first. why is there so much support first to offer this idea from us in right and center? why does it not have more traction? and i think we'll get there. i think right now it is the power of the lobbies that is tremendously strong. and i think we've had this report. as i said, i think the roosevelt-based lobbies that were just as strong, just as form, but nelson aldrich for example who was the dominant intellectual force in the senate and on these issues in the first decade of the 20th century, his daughter. don d rockefeller scion, right? the republican party, which was teddy roosevelt party was very tight with his mess.
and i would stress and one reason we wrote the book in one reason we give these talks is that the business side her, so it's not just about intellectuals and people writing books, but the fact there should take this very seriously. one player, one adores that we have, which is not in the book because it came too late to be included. the website by the way is "13 bankers".com. but george davis who is the chairman of united technologies, very big company sent us a nice endorsement and speaks very highly of the book good i would say he understands quite clearly that the financial arrangements we have in this country are not in the interest of their nonfinancial sector. he's absolutely right. we also people from the hedge fund sector, although not so many of them are afraid of the market crisis. we have other people from the
financial sector were given his endorsement. i think it will change. i think you need money. you need people who are willing to put money into political campaigns and to run against this issue. any -- that takes time and the checks and balances are healthy, but it means we don't spin around right away. we take our time and it takes a lot of arguing among ourselves the are we decide what is reasonable has changed is the world has changed. so we'll get there. but we get there fast enough? will get there before there's another crisis? i don't know. before there's another legislative opportunity? i don't know. now this is related to the antitrust event on the end of the spirit of antitrust movement, because of the antitrust is developed and focus on industrial companies, the concept that you have an antitrust and not particularly appropriate to banking. so for example i mean, we do have some legislative principles, which we can relate to.
for example, the rico act of 1994, the large banks and the company. nobody can be more than 10% of total retail deposit. and that's pretty low for an antitrust perspective. airflow from an antitrust perspective. don't let anyone become to. it was their intent. two problems her purse while all the options have not been in retail products. it's been with also market which is bank funding to other banks. so the retail captain workers speculate there were some loopholes of course and a lot that regulators were about things that you think of america through those loopholes, so those had to be close. but the spirit is there a figure not. i think it's a spirit of antitrust, that's what we need to figure out how to did and how to apply. and i'm serious. in 1902 there was no economic
theory to say what teddy roosevelt made sense. now i think it's obvious to everybody in the room what you would what companies to run all the rebels in the country. it's that kind of economy without competing its transportation. but it wasn't obvious to people then. so i think we have to shift our thinking when he took a lot of hard to give hard analysis, some of which is technical within economics come with a mock him the sum of which is completely accessible to everybody and everyone in this room. okay, back to the center. this gentleman in the middle here. >> it's difficult for people like us to grapple with the subjects like this. academics like yourself and we all say the same thing. there is a harvard business school fellow on today on cnbc and he said that it isn't that
bad. [inaudible] >> he said that he questions the two big to fail issue and said that the real issue is how intermixed the organizations are. you said the key issue is liquidity and of course enforcement and then there was some discussion about what it needed to be done to improve enforcement. but it is difficult when you have people saying different things. and i came away from his presentation a little heartened that the dodd bill was going to be a little better than you say. >> well, it's democracy in a variety of opinions and debate that's very healthy. but seriously, i don't understand -- i don't understand the argument, for example, that was made in "the new york times" column. the program is a fantastic source for sensible thinking on a lot of issues, including this
one. he said something on the lines of the issue is to interface. they're not too big to fail. well, checking the books that says all of the above. there's nothing coming out, and paul also said we should have effective regulation in this country. now i'm in favor of effective regulation for that site you in favor of a tasty dinner. i mean, why would you oppose effective regulation. if you can tell me how we get effective regulation 30 years of a lot of people not doing their job, i'm very interested that i'd like to see that plan. and it is striking to me that the best idea of the administration and the congressional leadership with regard to capital requirements and systemic risk and so on and so forth your thoughts to the regulators authority to sort this out and come back with the detail. but these are the guys who got it wrong for 20 or 30 years. they're the same guys, literally
the same guys in the same ideological meteor. kind of a stretch. but anyway, if you think other things are important, that's fine. i'm in favor of failsafe. i'm in favor of multiple barriers here. some people call it suspended. keep your pants up in more than one way because it matters if they fall down. you can call it what you want. and just because you could effective regulation is a good idea, i mean, that doesn't bear on the question of the thickness of the size of the banks. here's the key point, there is no social benefits you can point to other things being bigger than $100 billion in total assets. there are many social costs that i can point to. you say will find it, prove it. prove that making jpmorgan smaller will not have adverse consequences. that answers the question. i do think jpmorgan is about to
run an experience for me can worship the burden of proof be here. should the burden of proof be on the guys who just drag us into the biggest financial crisis since world war ii? that's what present obama calls it. that's what everyone calls it. should they have to -- should they have to prove that big is good for society and that those sites advantages are commensurate with the cost of theirs so manifestly created? i think yes. i think it's on them and they've got nothing. that's true, i do know that they have some research projects in progress, specifically to prove me wrong. but i think will evaluate the research when it appears on the same basis we evaluate research sponsored by pharmaceutical companies, with an appropriate degree of skepticism. on the right, this gentleman in the wake shirt. >> hi, i actually -- >> speak into the microphone for the cameras.
try and get the microphone to catch it. >> i did graduate here at sites in time and i have lots of the same debates with anchor friends of mine and along the same length as some of the questions at a party when asked what you just said, do you think that economics is suffering a little bit in terms of readability due to the fact that it's not a hard science, like you just may be jpmorgan is not about to run on an experiment because you said there koerner argument is if we were to go below $100 billion a year, that's going to cut into innovation. it's going to cut into potentially gdp growth and how these adverse effects that i can have the political messages equivalents of attacks, you know, you're keeping the american economy restrained when it should be growing and so on.
and i sort of, being towards the side of mr. volker. i do not have anything other than atm card in the last 30 years. it's really been that innovative and useful. but it seems like the burden of truth is actually sort of still with you. i mean, you sort of are trying to ask is, this is self-evident that they should be above a certain size, but i don't know if the accounts has approved this ad. >> well, penny of people have looked for places where they find it's between 10 and $20 billion prints of the evidence to go from 10,000,000,200,000,000,000 is a stretch. no one has found any evidence that they can about $100 billion does anything for anyone except the guys who run the bank geared up with the evidence is right now. i do agree completely that the pushback from the financial site are as well if you do that, you're really cause a big recession. and i would remind you that the necklace that'll set in the
1830's. and i would also tell you that when teddy roosevelt took on jpmorgan, there was a lot of concern and the submarket this would be destabilizing. you know, they have a lot of power. if they want to do damage to this economy, they probably can. they are threatening us. make no mistake about it. and you should go home and reflect on how you feel about that. you are being written. your representatives are being threatened by a few very powerful bankers. andrew jackson is on the $20 bill for a reason. not because he likes paper money. he hated paper money. he would be mortified if he was on the 24 other bill. he was on a $20 bill because he wants a very important site. he determined that we should not be captured to a financial oligarchy. i think i was a good call. i mean, we probably couldn't
imagine a different path with the central bank in the united states during the 19th century. maybe that would've been good. we didn't have that. but we also didn't have an economy dominated by a few very old distorted by them in the way that other places did in other places struggled with the ninth century including europe and latin america. at the gander jackson made the right call. on the politics, you now, you're probably guessing my funny accent i'm an immigrant could have been here 25 years greater than a citizen for 10 years. i thought long and hard for becoming a citizen. who you took the test to become an american? do you go, a few of you. do the rest of you know the test? i did well on the test. i think we have a very good constitutional framework and incredibly strong political tradition, but as far as i can see in all my reading and another is nothing that says
forever. there's something written or or shirt that says you don't get taken over and don't get distorted take so many other countries have great i think we can fight it off. i think the jackson roosevelt and sdi said friday that he but it has to be done. it doesn't happen for you. someone has to do it. okay, how we doing on time? with the constraint here? on the left and the front. and they will be around afterwards if i don't get to everybody's questions. >> first of all, i completely agree with your position. i made the save cushions after the crisis. i like to call it privatizing
the games, socializing losses hurt and i think it's got to stop somehow. and another one is an oligarchy capture. i think that's what happens and i think it's a good message to questions. first of all, you mentioned that we need to limit the size of the bank's and then they get to choose they are commercial banks or investment banks. and it needs to be done to bring the system into balance again. and my second question as i saw your article about jamie diamond and the question is, do you think it's beneficial to keep it private and have you heard back from him? >> if i may ask him which country you from originally? [inaudible] >> russia. does anything about her predicament here strike you as
unpleasantly familiar? >> exactly. why did i end up in a place of such dramatic change because i was in moscow in the 90's and now here i just moved from san francisco where i was on the bubble. if you could go back to moscow now -- no i'm just kidding. look, we've taken on, we've taken on some features here that you should prefer to describe to other countries. but with the other countries who say the oil and gas sector russia for example and sometimes in the other banks as well i would say has gotten too powerful. for the korean cable has taken over sort of the system. and whenever we see that in other countries, in fact whenever a treasury and 1990's in other countries, they always insisted that when he took antichrists measures come you
address the underlying problem, which is not easy to do. and that's what we have to do. i'm one of the other measures we have a long list. i mean, we talk about it in the book. i think the key blind spot was on legislation. that's when sensible people on capitol hill still are not getting through. but certainly we think there should be a lot more capital in the financial system. we think that if current official consensus on raising capital with a sickly ticket back, moved by financial institutions three b, roughly equivalent to what lehman brothers had the day before it failed, even if you measured it correctly, which doesn't strike as a particularly compelling idea. lehman didn't have enough capital. why would anyone at that level have enough capital. we also think over the counter of the days -- i know people's eyes glaze over whenever i say that, but it's important in its very political. but it should be -- they should
all be on exchanges in the should be a lot more capital held against riveted positions and you see a contraction in the not to trade a macintosh on that basis are the results a big subsidy for derivatives, which arises from the big rocher dealers to arise from the contracts are too big to fail and that's a big part of the problem there. i think that lesson the bank size as for jamie diamond, you know, all the points he makes are about policy. this is not a personal anti-individual per se. i think it is also to put names on it. this is not a can you see. i mean, most of the reviews of art that have been very positive. i think two people so far say a conspiracy theory. well, they didn't read the good this is not people conspiring. this is a system. it's a system of incentives and believes that developed over time. and it's a very unfortunate distorted system that needs to be fixed. and i'm happy to talk to any
banker, big or small, who wants to talk about this and to engage with them at every opportunity. and jamie diamond has not yet called me. last night how about this lady in the middle. how many more questions? tomorrow. this lady here in this gentleman here. then i -- we can be small questions. >> recently i've heard a lot of people talking about paul volcker's proposal rule that these organizations should not be trading in their own account with our money in just a screen said the other day i agree with them, but it just isn't practical. you won't be able to separate the account from the proprietary accounts of the bank, the personal trading to the other training. now i've heard others say, you can't separate it. sounds good, but in the real world it won't work.
to you think it would work? >> yes, certainly could work. i testify to the banking committee on february and this issue. they remember us representatives of the big unit defining against an omnibus was john reese, the former head of citibank who says he regrets putting together the sizes get a bang. he also says in his view you could impose this kind of restriction on proprietary trading for any large bank, for example. i think the deeper more troubling question is how much difference that would make it what they find other ways to get around that? would they find other ways to take excessive and i'm sure they would. so while i'm supportive of the poker rule, both in general and this is on the specifics, i do not think it would solve much of our problems and i really don't and would address a problem of too big to fail. so that's fine, let's do it, but you should not regard that as a
substitute -- really vote, it's a set of solutions and you got to go after the multiple directions. some of them are not going to work and it's good to have redundancy built into that service system. but the amount in effect to give for that particular measure would be tiny. and even as part of a set of measures if not i think the key issue. this young gentleman here has the last question. second row on the i/o. >> thank you. does what you have in mind need to be done and all of the world financial centers in order to be effect in preventing the next crisis or is this something that can just be done here and that would be enough to avoid the subtitle of your book? >> well, certainly can be done here, should be done here. it would be immensely helpful for avoiding a massive meltdown could i do worry about the rest of the world and i think we should take a leadership role.
we should push for them to bring in their banks. you know, they are much deeper. many countries are much deeper and the soul of relying on relatively few megabanks than we are. we have by tradition, by history and i are established practice a more decentralized systems in some countries. it is more concentrated over time, but we can reasonably imagine a situation where we have 100 billion-dollar banks competing with each other and globally, rather than cannot be fall relative to our economy where some countries have a $100 billion bank would be big relative the country in some countries, including in europe think the answer just fine. now, i think first and foremost window of this ourselves and then if they don't want to come we have to consider to what extent we regarded as safe for nonfinancial companies to do business with massive banks that could get in trouble in other countries. and to whaxt